Am. Coll. of Emergency Physicians v. Price

• Decision Date: 31 August 2017
• Docket Number: Civil Action No. 16–913 (CKK)
• Citation: 264 F.Supp.3d 89
• Parties: AMERICAN COLLEGE OF EMERGENCY PHYSICIANS, Plaintiff, v. Thomas E. PRICE, M.D., et al., Defendants.
• Court: U.S. District Court — District of Columbia

264 F.Supp.3d 89

AMERICAN COLLEGE OF EMERGENCY PHYSICIANS, Plaintiff,

v.Thomas E. PRICE, M.D., et al., Defendants.

Civil Action No. 16–913 (CKK)

United States District Court, District of Columbia.

Signed August 31, 2017

Ronald S. Connelly, Powers, Pyles, Sutter & Verville, Washington, DC, for Plaintiff.

Chetan A. Patil, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

COLLEEN KOLLAR–KOTELLY, United States District Judge

At the center of this case is a rule that sets forth how much insurers are required to pay out-of-network physicians for emergency health care services. Prior to this rule being finalized by the Departments of Health and Human Services, Labor and the Treasury ("the Departments"), Plaintiff and other groups submitted comments to the Departments expressing their concerns about the rule—for example, that the methods it used to set payments were not transparent and could be manipulated by insurers. Many of these commenters proposed using a transparent database to set payments instead. The Departments all but ignored these comments and proposals.

Although the subject matter of the parties' dispute in this case is complex, the Court's obligation under the Administrative Procedure Act ("APA") is simple. The Court must remand this case to the Departments for further explanation of their rule. Accordingly, upon consideration of the pleadings,¹ the relevant legal authorities, and the record for the purposes of the pending motions, the Court will GRANT–IN–PART and DENY–IN–PART WITHOUT PREJUDICE Plaintiff's [14] Motion for Summary Judgment, DENY WITHOUT PREJUDICE Defendants' [15] Cross–Motion for Summary Judgment, and REMAND this matter to the Departments.

I. BACKGROUND

A brief explanation of the statutory background is necessary to place the parties' dispute in context. The Emergency Medical Treatment and Labor Act ("EMTALA") requires hospitals with emergency departments to "provide for an appropriate medical screening examination" for any individual who comes to their emergency department if "a request is made on the individual's behalf for examination or treatment for a medical condition." 42 U.S.C. § 1395dd(a). If the hospital determines that the individual has an emergency medical condition, it must provide, within its capabilities, "for such further medical examination and such treatment as may be required to stabilize the medical condition, or for transfer of the individual to another medical facility ..." Id. § 1395dd(b).

The subject of this lawsuit is how insurers pay physicians for the emergency services EMTALA requires them to provide. In the midst of an emergency, individuals are often not able to choose which hospital or doctor to go to on the basis of whether they are in their insurer's network. The Patient Protection and Affordable Care Act ("ACA") contains a provision entitled "Patient Protections" which states that "[i]f a group health plan, or a health insurance issuer offering group or individual health insurance [coverage], provides or covers any benefits with respect to services in an emergency department of a hospital," and such services are provided to a participant, beneficiary or enrollee by an "out-of-network" provider, the "cost-sharing requirement (expressed as a copayment amount or coinsurance rate) [must be] the same requirement that would apply if such services were provided in-network." 42 U.S.C. § 300gg–19a(b). In other words, the ACA requires that insured individuals who need emergency medical treatment not be charged higher copayment or coinsurance rates for that treatment simply because they happened to be treated by a provider who was not in their insurer's network.

On June 28, 2010, the Departments published an Interim Final Rule entitled " Patient Protection and Affordable Care Act: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections." AR0001–55 (75 Fed. Reg. 37,188 ). Part of that Interim Final Rule dealt with the emergency services provisions of the ACA described above. The Departments explained that, despite the protection provided to patients by the ACA's requirement that the copayment or coinsurance rate for out-of-network services be no greater than the rate for in-network services, patients who were treated by out-of-network providers during emergencies were still at financial risk because those providers could, in many states, still "balance bill patients for the difference between the providers' charges and the amount collected from the plan or issuer and from the patient in the form of a copayment or coinsurance amount." AR0008. The Departments concluded that "[i]t would defeat the purpose of the protections in the statute if a plan or issuer paid an unreasonably low amount to a provider, even while limiting the coinsurance or copayment associated with that amount to in-network amounts," because this would still lead to unreasonably high amounts being charged to the patient in the form of "balance billing." Id. Accordingly, the Departments stated that "it [was] necessary that a reasonable amount be paid before a patient becomes responsible for a balance billing amount." Id.

In order to ensure that a "reasonable amount be paid for services by some objective standard," the Interim Final Rule established that "a plan or issuer satisfies the copayment and coinsurance limitations in the statute if it provides benefits for out-of-network emergency services in an amount equal to the greatest of three possible amounts—(1) The amount negotiated with in-network providers for the emergency service furnished; (2) The amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable charges) but substituting the in-network cost-sharing provisions for the out-of-network cost-sharing provisions; or (3) The amount that would be paid under Medicare for the emergency service." Id. This is referred to as the "Greatest of Three" or "GOT" regulation because it sets the amount insurers are required to pay for out-of-network emergency medical services at the greatest of the three listed amounts.

During the comment period for this interim rule, some praised the GOT regulation and others expressed concerns. Among other things, Plaintiff commented that it was concerned about the second prong of the GOT regulation to the extent it referenced "usual, customary, and reasonable" ("UCR") charges or rates as a possible method for calculating payment. AR0082. It noted that the manner in which UCR rates are calculated by insurers is often not transparent and may be inaccurate. Id. Plaintiff suggested that an independent database, such as one then being created by an entity called FAIR Health, could potentially be used to determine how much insurers should pay emergency physicians. Id.² Other groups, such as Advocacy for Patients with Chronic Illness, Inc. and Lybba (AR0061–62), the Emergency Department Practice Management Association (AR0129–32), the American Medical Association (AR0224–30), the American Hospital Association (AR0351–53), the Texas Medical Association (AR494–503), the Healthcare Association of New York State (AR0538–40), and the California Chapter of the American College of Emergency Physicians (AR0545–48), all submitted similar comments expressing their concern about the lack of transparency and potential for manipulation of rates under the GOT regulation. Many referenced the FAIR Health database as a potential alternative solution.

On November 18, 2015, the Departments issued the final version of the rule. AR0679–782 ( 80 Fed. Reg. 72,192 ). The Final Rule adopted the GOT regulation without substantive revision. In response to the comments described above, the Departments simply stated:

Some commenters expressed concern about the level of payment for out-of-network emergency services and urged the Departments to require plans and issuers to use a transparent database to determine out-of-network amounts. The Departments believe that this concern is addressed by our requirement that the amount be the greatest of the three amounts specified in [the GOT regulation].

AR0701.

Dissatisfied with the Departments' response to its concerns, Plaintiff filed this lawsuit. Plaintiff alleges that the Final Rule "is invalid because it does not ensure a reasonable payment for out-of-network emergency services as required by statute, and [because] the Departments did not respond meaningfully to [Plaintiff's] concerns about the serious deficiencies of the regulation." Compl., ECF No. 1 at ¶ 1. Specifically, with regard to the Department's allegedly deficient response, Plaintiff states that the Departments "failed to respond meaningfully to [Plaintiff's] concern that insurers should be required to use a transparent database to determine out-of-network UCR payments to emergency physicians." Id. ¶ 50. Now pending before the Court are the parties' fully-briefed cross-motions for summary judgment.

II. LEGAL STANDARD

Under Rule 56(a) of the Federal Rules of Civil Procedure, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." However, "when a party seeks review of agency action under the APA [before a district court], the district judge sits as an appellate tribunal. The ‘entire case’ on review is a question of law." Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001). Accordingly, "the standard set forth in Rule 56 [ ] does not apply because of the limited role of a court in reviewing the administrative record .... Summary judgment is [ ] the mechanism for deciding whether as a matter of law the agency action is supported by the administrative record and is otherwise consistent with the APA standard of review." Southeast Conference v. Vilsack , 684 F.Supp.2d 135, 142 (D.D.C. ...